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Join Our Research Team at DMA 2014
Dec 10, 2013
Case Study

E-commerce Marketing: 540% higher revenue-per-email for automated send

SUMMARY: E-commerce marketers who sell custom or expensive items are typically not looking for impulse buyers. Instead, they nurture long-term relationships, hoping for a sale weeks or months down the road.

A custom clothing site decided to build relationships with its email program, and to do so, it tested an autoresponder with hand-picked product suggestions. The result: 540% higher revenue-per-email in the first test. See how the team selected targets and expanded the program to other segments.
by Adam Sutton, Senior Reporter

CHALLENGE

Indochino sells custom men's clothing. Customers can take months to decide on a purchase, so the company stays in touch to build relationships as customers mull it over.

That focus on relationships extends well beyond a customer's purchase, said Sarah Wallis, COO, Indochino. Wallis is responsible for the company's sales and marketing.

"If somebody makes a purchase from you and all you keep doing is send them batch-and-blast emails, you've ignored that first step that they've taken in the relationship," she said.

Wallis wanted to use the information customers shared to say something meaningful through email. But, without a big team or expensive marketing tools, how could she send emails that strengthened relationships and increased sales?

CAMPAIGN

Indochino tested sending an automated email with hand-picked product recommendations to carefully chosen customers. The hope was the relevance of the message would spark more sales.

The tactic worked and the team started expanding the program. Here are the steps taken.

Step #1. Commit to relationships

After a purchase, Indochino has a big opportunity to strengthen its relationship with customers, Wallis said.

"You have to recognize that you have moved into a fundamentally different stage of the relationship where the customer has now willingly given your information and you have an obligation to use it," she said.

For example, a customer who buys an orange blazer has indicated a different type of fashion sense than a customer who only buys black suits. The marketing team thought it could use this information to say something more relevant to customers.

"I feel like the more information I have, the more strength I have, so I've put my effort and focus in areas where I feel I have the most information and the highest percentage of opportunity to get the communication right for the customer," she said.

Step #2. Start with best-sellers

The team started with one of its most popular products, the Essential Grey Suit. The marketing team thought they could increase sales by recommending products to customers based on the price, style and type of a recent purchase.

The only problem was the team didn't have fancy marketing tools to segment and target its offers. Indochino scheduled a simple email to offer customers who bought the suit a bundle of three shirts that were hand-picked to match.

This email reached customers four days after purchasing the suit.

The result: Revenue-per-email sent was 540% above the benchmark.

Step #3. Estimate results and expand

Excited by the response, Indochino used the metrics to estimate the results it could achieve by creating similar emails for other segments.

Most of the other segments were groups of customers who purchased a given product. When deciding on whether to create an email for each group, the team considered two factors:
  1. Could the team make recommendations that were good enough to significantly increase RPE?

  2. Did enough customers purchase the item to make the investment worthwhile?

"I use revenue-per-email sent as the key metric to determine the efficiency of any email campaign," Wallis said.

As the team tried different segments, the campaigns that achieved good results were set to run permanently.

Step #4. Skip the weekly batch-and-blast

Customers who purchase an item and receive one of the automated emails described above do not receive Indochino's general promotional email for one week.

Over time, as Indochino adds more automated emails, Wallis expects the number of customers who receive the general email will drop as the number of customers who receive the targeted emails rise.

"That means overall, you are increasing the efficiency of your email program," she said.

For now, the weekly promotional email isn't going anywhere.

"It's not like you can send one targeted email per week to a sub-set and not do your batch-and-blast and generate the revenue that you need," Wallis said. "What you need to do is implement as many highly relevant, segmented emails as you can."



RESULTS

Indochino's average revenue-per-email increased 20% in the first four months of launching automated campaigns, and overall email revenue also climbed, Wallis said.

"What we found was that spending time and effort on really getting our targeted and segmented email messages right is absolutely a good use of our limited resources," she said.

Here are more results from the team's first autoresponder test, described in Step #2:
  • Open rate: More than twice the team's benchmark

  • Clickthrough rate: less than 10% of benchmark

  • Conversion rate: 340% higher than benchmark

  • Revenue-per-email sent: 540% above benchmark

Instead of only sending one-offs, Wallis suggests marketers adopt a consistent process to test and send automated campaigns.

"In terms of ensuring success with a lifecycle-message email program, make sure that what you're setting up is repeatable," she said.

Creative Sample

  1. Autoresponder email

Source

Indochino

Related Resources

Email Marketing: E-commerce site increases online ticket purchases by 66% with relevant content

Email Marketing: E-commerce company's behavior-based marketing tactics increase CLTV 416% in 14 months

MarketingSherpa Email Summit 2013: Using buyer behavior in email campaigns

Email Marketing: 6 bad habits to avoid when testing emails



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